Analyzing the cross in a H4 chart, we may notice an interesting bearish pattern.
In fact, the last upward movement has stopped close to the trend line bearish and from yesterday's session, was pushing the quotations down. Moreover, the last point of contact with the trend line (point 5) corresponds to the retracement 78.6 calculated on the 3/4 side. It should be noted that the dynamic resistance, in the past has already been tested exactly in the middle like of the current month in the test area (point 3) which corresponds to 61.8 of the Fibonacci retracement calculated on the 1/2 side. It is possible that in the next sessions we could see the continuation of the bearish movement with the price testing the support at 0.7100.
About the author:
Giancarlo Della Pietà is an active trader since 2006. In 2010, he wrote the book “Trading in Forex - How to trade with technical analysis in the foreign exchange market”. He is collaborating with TeleTrade as a Chief Technical Analyst and Currency Strategist since 2012. Specifically, he is in charge of the daily video-analysis “Daily Market Briefing” and “Weekly Market Outlook” which are based on combined macroeconomic analysis and technical analysis. Furthermore, he presents the program “Diretta Live”. His favorite approach is technical and graphical analysis applying Elliott wave theory.